Menu

Tuesday, October 04, 2016

Sizing Up The Bubble

John Hussman sees the stock market currently as being in the 3rd financial bubble since 2000 .. blames the Federal Reserve: "The great victory of the Federal Reserve in the half-cycle since the financial crisis was not ending the global financial crisis; the crisis actually ended .. with the stroke of a pen that changed accounting rule FAS157 and eliminated mark-to-market accounting for banks .. the great Pyrrhic victory of the Fed has been to enable the third most extreme financial bubble in history, on the basis of capitalization-weighted indices, and the single most extreme bubble in history from the standpoint of individual stocks . Central banks have intentionally extended this speculation by promising that they, themselves, could be relied upon to be those greater fools .. What will drive the next crisis is not some rate hike by central banks (whose activist interventions have essentially zero correlation with subsequent real economic outcomes). Instead, the collapse will emerge both naturally and inevitably, as the progression of the economic cycle takes its course, and investor preferences shift from risk-seeking to risk-aversion. Virtually any commonplace shock is now capable of being a pin-wielding butterfly on this increasingly vulnerable financial bubble. Debt defaults, insolvencies, and pension crises are already unavoidable."- John HussmanLINK HERE to the essay

SEARCH ALL OF CLIFFKULE.COM HERE:

Recent Comments:

GREAT VALUE - Use our website as a database on just about any topic relating to the financial crisis, investing, Federal Reserve, Wall Street, financial repression, economics, sound money & the debauchery of currency plus articles & videos from the gurus in the industry - simply use the SEARCH Tool in the right hand side our website, just slightly above this note ... or LINK HEREthen type in the URL after the "http://www.cliffkule.com/search?q=" whatever you want to search for, separated by +, hit ENTER to view the search results! .. for example, for searching on the Federal Reserve, type in http://www.cliffkule.com/search?q=Federal+Reserve then hit ENTER

DIRECTIONS TO GET TO OLDER POSTS:Scroll down the webpage until you find the last post showing .. below it you will see (slightly to the right) the link to "Older Posts" - click on that and you will then see the prior 20+ posts - click on "Older Posts" again at the bottom to get the prior 20+ posts, and so on and so forth .. the other way is use the menu just below "Older Posts" for the specific date and click on that specific date.